This invention generally relates to a self-service financial terminal, and more particularly, it relates to such a terminal which provides its customers with bank-guaranteed, negotiable instruments such as checks which are accepted by merchants without delay or question.
Statistics indicate that banks currently process more than 30 billions of checks per year. It is estimated that over 4 billions of these checks are written by individuals for food, retail goods, and gasoline. Most of these checks are written at the point of sale and necessitate that the affected merchant make an on-the-spot decision to accept or reject the check being offered in order to complete the transaction. The imperfection of these decisions is demonstrated by the fact that recent bad-check losses for retail stores are well over a billion dollars per year.
Some of the attempts to reduce these bad-check losses include, for example, requesting multiple identifications, fingerprints, photographs, and also requesting management approval of the checks prior to accepting them. These attempts further result in customer dissatisfaction due to inconvenience, delays, and embarrassment.
Another common approach to reducing bad-check losses relates to using a list or file of persons from whom checks will no longer be accepted. This approach is often implemented as a printed list or is implemented through electronic inquiry of a list at a central file. Even if a person's name is not on such a list, the present balance in his checking account may not be adequate to cover a check he intends to offer a merchant, but this fact is not known to the merchant under this approach.
A somewhat more sophisticated version of a list at a central file (previously described) relates to the use of a small dedicated terminal which is operatively coupled to a bank office in an on-line or real-time environment. An individual's "credit card" or "debit card", for example is entered into the terminal to obtain the checking account number, a Personal Identification Number (hereinafter referred to as PIN) is also entered into the terminal, and the amount of the check to be presented is also entered therein. Approval or disapproval of the check for the amount of the check is then printed on the back of the check. While this approach is more effective towards reducing bad-check losses than the manual methods previously discussed, it is still vulnerable to falsification and forgery. For example, one survey indicated that well over 50% of card holders wrote their PIN's on their respective cards so as to not forget the PIN's; consequently, the security of a PIN-based system is susceptible to falsification and forgery. Also, the form of the printed characters on the back of a check which indicate "approval" are typically simple matrix font characters which are easily forged.